(Yicai Global) July 20 -- Foreign direct investment in the Chinese mainland in actual use fell 2.7 percent in the first half, mainly because of the slower global economic recovery, sluggish cross-border investment worldwide, and a high base of comparison last year, according to the vice minister of commerce.

China used CNY703.7 billion (USD97.4 billion) of foreign capital in the six months ended June 30, Guo Tingting said at a press conference yesterday. Some 24,000 new foreign-invested firms were established in the first half, up 36 percent from a year earlier, he added.

Global transnational investment fell 12 percent last year, Zhu Bing, deputy director of the ministry’s foreign investment administration department said at the media briefing. China’s FDI in actual use in US dollar terms rose 8 percent to USD189.1 billion in 2022 from the previous year, he noted.

First-half FDI in use fell 2.7 percent, but short-term fluctuations will not harm foreign investors’ optimism about China’s development prospects, as they will generally continue to boost investment in the country, Zhu pointed out.

China’s economy is robust, has potential, and its positive economic fundamentals remain unchanged, Zhu said, adding that the country’s open market offers foreign businesses more opportunities to develop, and its comprehensive advantages to attract investors, such as a complete industrial system, advanced infrastructure, rich human resources, and improving business environment, have been strengthened.

The ministry will promote higher-level opening-up and hike foreign investment policy support, Zhu noted, adding that China will continue to be a popular destination for foreign investment.

China has become a very attractive market, and its ability to innovate appeals to foreign companies because innovation is a driving force in the development of the entire industrial sector, Denis Depoux, global managing director at German consultancy Roland Berger, told Yicai Global.

China is transitioning from a labor-intensive to a labor- and technology-intensive economcy, said Jacob Hook, managing partner, Asia Pacific at international consultants Oliver Wyman. The country will remain a key global manufacturing center in the years to come, he added.

Editor: Futura Costaglione